Contract analysis

I. Privileged Communication Notice This Memorandum constitutes a privileged and confidential communication protected by the attorney-client privilege, the work product doctrine, and all other applicable privileges and protections. It has been prepared by Calderwood & Harkness LLP in anticipation of potential litigation and for the express purpose of rendering legal advice to the client. This Memorandum reflects the m

II. Executive Summary Calderwood & Harkness LLP has reviewed the Preliminary Freedom-to-Operate Assessment Report prepared by Crestline IP Advisory LLC (Dr. Raymond Cho, Patent Attorney), dated April 10, 2025 (the "Crestline Preliminary Report"), concerning the United States patent portfolio of NovaSense Medical Technologies Inc. ("NovaSense") as it relates to Solstice's Solstice Lumina™ Continuous Glucose Monitoring

III. Background and Context A. The Solstice Lumina™ CGM System The Solstice Lumina™ CGM System is a two-component continuous glucose monitoring system intended for the United States market. Solstice plans to seek marketing authorization via the traditional 510(k) premarket notification pathway, with the submission covering both the Lumina C14 implantable sensor and the Lumina R7 wearable reader/transmitter as an inte

IV. Identification of Relevant NovaSense Patents Of the fourteen (14) U.S. utility patents in the NovaSense portfolio reviewed by Crestline, three (3) have been identified as having potential relevance to the Lumina CGM System. Each of these patents is discussed in detail below, together with Crestline's preliminary risk assessment and Calderwood & Harkness's analysis. A. U.S. Patent No. 10,847,221 — "Electrochemical

V. Overall Risk Characterization and Summary Table The following table summarizes the risk assessment for each of the three NovaSense patents identified as relevant to the Solstice Lumina CGM System: Overall Portfolio Risk Assessment: Low-to-Moderate. The aggregate intellectual property risk associated with the NovaSense patent portfolio, as it relates to the Lumina CGM System, is assessed as low-to-moderate. This ri

VI. Design-Around Efforts and Mitigation Strategy A. Engineering Design-Around for U.S. Patent No. 10,847,221 In light of the low-to-moderate risk assessment associated with U.S. Patent No. 10,847,221, SBD's engineering team, under the direction of Dr. Aisling Burke, Chief Technology Officer, has initiated development of an alternative electrode deposition process designed to reduce or eliminate the identified overla

1. Patent Prosecution Monitoring. Calderwood & Harkness recommends establishing a patent watch service to monitor NovaSense's ongoing patent prosecution activity, including any continuation applications, continuation-in-part applications, divisional applications, or reissue proceedings filed by NovaSense at the United States Patent and Trademark Office. This monitoring will provide early warning of any new patent cla

2. Potential Inter Partes Review (IPR). If the claim scope of U.S. Patent No. 10,847,221 cannot be adequately designed around and the full claim chart analysis confirms a meaningful infringement risk, Solstice should consider filing a petition for inter partes review (IPR) before the Patent Trial and Appeal Board (PTAB) challenging the validity of the relevant claims of the '221 Patent. An IPR petition would need to

3. Licensing Negotiations. Potential licensing negotiations with NovaSense are not recommended at this stage. Premature outreach to NovaSense regarding licensing could alert NovaSense to Solstice's planned U.S. market entry with the Lumina CGM System and the predicate device relationship, potentially prompting NovaSense to take preemptive action, including enforcement of its patent rights or modification of its compe

4. Insurance Coverage Review. Solstice's current product liability insurance policy, underwritten by Atlas Underwriting Partners Ltd. (Policy No. AUP-PL-2024-00893; limits of $25 million per occurrence / $50 million aggregate; policy period October 1, 2024 through September 30, 2025), does not cover patent infringement claims, demands, or litigation costs. Patent infringement is expressly excluded under the standard

VII. Implications for Regulatory Strategy The FTO analysis and the intellectual property risk assessment summarized in this Memorandum do not affect the regulatory pathway or predicate device selection for the Lumina CGM System's 510(k) submission. FDA clearance under the 510(k) pathway is a determination of substantial equivalence to a legally marketed predicate device and is independent of patent rights. FDA does n

VIII. Privilege and Confidentiality Considerations Calderwood & Harkness reiterates and emphasizes the following privilege and confidentiality considerations in connection with the FTO analysis and this Memorandum: Attorney-Client Privilege and Work Product Protection. All communications between Calderwood & Harkness LLP, Crestline IP Advisory LLC, and Solstice (including SBD and SBI) relating to the FTO analysis, th

IX. Recommended Next Steps and Action Items Based on the analysis and findings summarized in this Memorandum, Calderwood & Harkness recommends the following next steps and action items:

1. Crestline Final Claim Chart Review. Solstice should await Crestline's final claim-by-claim chart analysis, which is expected to be completed in early June 2025. The final analysis will cover all three identified NovaSense patents (U.S. Patent Nos. 10,847,221; 11,234,567; and 11,502,893) against both the current Lumina C14 and R7 designs and the proposed alternative electrode deposition process. The Crestline FTO a

2. Engineering Design-Around Confirmation. Dr. Aisling Burke and the SBD engineering team should finalize the alternative electrode deposition process as expeditiously as possible and provide complete technical documentation to Crestline for review. The technical documentation should include detailed descriptions of the revised layer compositions, deposition parameters, layer ordering, and thickness specifications, a

3. Impact Assessment on Regulatory Submission. If design-around modifications are adopted, Solstice should coordinate with Pinnacle Regulatory Consulting Group LLC (Dr. Sandra Ellison, Thomas Greenbaum) and Whitmore Laboratories (Dr. James Haverford) to assess the impact of the modifications on the Pre-Sub device description, biocompatibility testing scope, and performance testing requirements. This assessment should

4. Pre-Sub Package Alignment. Solstice should ensure that the device description in the Pre-Sub meeting package accurately reflects the final commercial design of the Lumina C14 sensor, incorporating any design-around modifications that are adopted. The target submission date for the Pre-Sub meeting package is June 16, 2025, for a Pre-Sub meeting with CDRH, OHT2, Division of Chemistry and Toxicology Devices, currentl

5. Patent Watch. Calderwood & Harkness recommends establishing a patent prosecution monitoring service to track NovaSense's patent activity at the U.S. Patent and Trademark Office, including continuation applications, reissue proceedings, and new patent filings in the CGM sensor space. This monitoring should be established as soon as practicable. Crestline or an alternative patent watch service provider can be engage

6. IP Insurance Evaluation. Solstice should evaluate the availability and cost of intellectual property litigation cost insurance or IP indemnity coverage as a supplement to the existing Atlas Underwriting Partners Ltd. product liability policy (Policy No. AUP-PL-2024-00893). Calderwood & Harkness can provide referrals to insurance brokers experienced in IP insurance for medical device companies. This evaluation shou

7. Updated Risk Assessment. Calderwood & Harkness will issue an updated FTO risk assessment memorandum upon receipt and review of Crestline's final claim chart analysis. The updated memorandum will provide revised risk assessments for each identified patent, an evaluation of the effectiveness of the design-around modifications, and updated recommendations regarding mitigation strategies, including potential IPR petit

X. Conclusion Based on the Preliminary FTO Assessment Report prepared by Crestline IP Advisory LLC and Calderwood & Harkness's review and analysis of that report, the overall intellectual property risk associated with the NovaSense Medical Technologies Inc. patent portfolio, as it relates to the Solstice Lumina™ CGM System, is assessed as low-to-moderate. The primary area of concern is U.S. Patent No. 10,847,221, "El